An Analysis On Financing Problems Of China's Franchise Enterprises

Franchise is one of the most popular modes for company expansion andindividuals to start its own business. It acclimatizes itself to the modern productionand the change of consumption demand. It is a highly effective business mode whichruns the business in mass-construction at low cost, providing standardized service,scientific management. In recent years, franchise develops very quickly in ChinaMainland. It is applied into many industries. In practice, many companies met manydifficulties and obstacles, one of which is the financing problem. The financingservice provided to companies by financial institutions such as local banks is differentbecause of their property right and ownership. Compared with state-owned companies,non state-owned or collective companies will undergo more rigorous examination toget credit, so many middle or small companies can't get the powerful support fromlocal financial institutions. Furthermore, very finite financing means, narrowfinancing channels and high financing cost are the huge difficulties faced by franchiseenterprises. All these are urgent problems which should be resolved as soon aspossible. This thesis will discuss thoroughly the financing problems faced byfranchise enterprises based on several aspects such as the current financing situationof franchise enterprises, the reasons for financing problems, the calculation offinancing scale, financing channels, the improvement of financing environment andthe reinforcement of financing capability.